And here we go.........investor claims against brokerage firms, hedge funds and banks are going to start rolling in. Reuters is reporting that Bear Stearns has been hit with its first arbitration over the losses in two of its hedge funds.
According to Reuters, the claimant lost $500,000 and is blaming Bear for misleading him about its exposure to subprime mortgages.
While it appears that investor losses from subprime lending are going to be significant, the mere fact that an investor lost money in funds investing in such vehicles does not necessarily mean that there is a viable claim against the broker or the brokerage firm.
Investors who are contemplating filing claims would be wise to first have their case reviewed by a financial professional, or an experienced securities attorney, before pouring additional funds into the litigation process. Brokers who have recommended funds with significant subprime exposure should be reviewing those investments and, if necessary, consulting with outside counsel regarding potential exposure.
The brokerage firms are already gearing up for these cases.
